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Wis. SC affirms $9M in damages for state Medicaid program

By Jessica M. Karmasek | Jun 26, 2012


Van Hollen

MADISON, Wis. (Legal Newsline) - The Wisconsin Supreme Court on Friday affirmed a jury verdict of $9 million in damages for the state's Medicaid program.

The Court's 65-page ruling follows an appeal from a 2009 judgment against Pharmacia Corporation.

In addition to the $9 million in damages, the judgment imposed forfeitures of $4,578,000 and awarded costs and attorney fees in the amount of $8,819,352.44 for Pharmacia's conduct related to the use of AWPs to set the price for drugs purchased by Wisconsin's Medicaid program.

AWPs are the average price at which drugs are purchased at the wholesale level.

In its decision, the Court held that the State was entitled to a jury trial on its claims for damages, that there was sufficient evidence to affirm the jury verdict and Dane County Circuit Court Judge Richard Niess "properly assessed" the number of violations for which a forfeiture could be assessed.

All three issues were certified to the Court by the state Court of Appeals.

"Because the damages were based on reasonable inferences drawn by the jury from credible evidence, we hold that it did not speculate and accordingly uphold the award," Justice Michael Gableman wrote for the Court.

Justices Ann Walsh Bradley, N. Patrick Crooks and David Prosser did not participate in the decision.

The case will now head back to the appeals court to address the remaining issues not certified to the state's high court.

Wisconsin Attorney General J.B. Van Hollen applauded the Court's ruling, saying companies that defraud the state's Medicaid program need to be held accountable because fraud reduces the money available to those who truly need assistance.

"We place a high priority on protecting taxpayer dollars," he said in a statement Friday.

"Today's decision goes a long way toward holding Pharmacia accountable and puts the other AWP defendants on notice that the State of Wisconsin is prepared to do whatever it takes to bring these cases to a successful conclusion for the people of this state."

The State filed its civil action against Pharmacia and several dozen large pharmaceutical manufacturers in 2004, alleging that each reported inflated AWPs.

According to Van Hollen's office, to-date the State has recovered more than $17 million in settlements with 10 of the named defendants in addition to the $22 million in damages, forfeitures and costs awarded against Pharmacia.

Claims against 25 other manufacturers remain pending, the attorney general said.

The trial court proceedings against the remaining manufacturers, he said, were stayed pending the results of the Pharmacia appeal.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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